The Day at a Glance | February 7 2024

The Top

*In January, 307,069 light vehicles were produced, and 254,367 units were exported.

*In Mexico, consumer confidence increased from 46.8 points in December to 47.1 points in January.

*The goods and services trade balance in the United States closed 2023 with a deficit worth $773.4 billion, which is -18.7% compared to 2022.

*Industrial production in Germany fell more than expected in December, marking 7 months of contraction.

*Hamas proposes a 135-day ceasefire in Gaza with a total withdrawal of Israel.

*Global markets mixed; investors take in another wave of corporate earnings.

Economic environment

In January, 307,069 light vehicles were produced, and 254,367 units were exported. Regarding production and compared to January 2023, there was an increase of 9.6%, while annual export growth was 6.8%. By brand and compared to the first month of 2023, the largest increases in production were in Volkswagen with an increase of 93.1%, followed by BMW and Honda with 80.2% and 77.8%, respectively. On the export side, the brands with the highest annual growth were Nissan at 1.5 times and BMW at 1.4 times compared to January 2023. Each month, INEGI collects information from the 23 companies affiliated with the Mexican Association of the Automotive Industry (AMIA), Giant Motors Latin America, and Autos Orientales Picacho.

Markets and companies

Global markets mixed. S&P 500 futures are advancing this morning as investors analyze another wave of quarterly results midway through the corporate earnings season. A robust earnings season, coupled with expectations of an interest rate cut by the Fed, has been a source of strength on Wall Street. Much of the earnings upside has been led by large-cap technology companies with a focus on artificial intelligence, a phenomenon that has also contributed to the upward trend in the markets. However, stocks have pulled back from their record highs as doubts grow about when the Federal Reserve will start to cut interest rates. After the central bank held rates steady last week, Chair Jerome Powell suggested investors may have to wait longer than expected for policy relief, and other Fed officials have started to back him up this week. S&P 500 futures are up +0.68%, Nasdaq futures +0.89%, and Dow Jones futures +0.37%. In Europe, markets retreat on Wednesday due to ongoing uncertainty about rate cut prospects. The pan-European Stoxx 600 fell 0.3% in the early hours, with most sectors trading in negative territory. Oil and gas stocks were down 0.8%, while autos were up 1.3%. In Asia, most indices rise as investors assess corporate earnings and China’s efforts to boost its market. South Korea’s Kospi increased by 0.95%, leading gains in Asia, while the Kosdaq gained 0.48%. In Mexico, IPC futures are seen higher (+1.17%), reaching $59,365 points. Oil prices rise on Wednesday as the growth in U.S. oil production is expected to remain largely stable through 2025, easing concerns about oversupply. Brent crude futures increase +0.7%, while West Texas Intermediate crude advances +0.8%. On the other hand, metals are down: gold is down -0.1%, silver -0.8%, and copper -0.2%. Finally, cryptocurrencies also log declines: Bitcoin -0.2%, XRP -1.55%, Ethereum -0.74%.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 17.01 and a maximum of 17.07, currently trading at 17.05.

Corporate news

*Snap’s stock fell 32.2% on Wednesday morning, a day after the company reported worse-than-expected revenue and offered weak guidance. Snap said it was facing headwinds from the Israel-Hamas war.

*Alibaba rose as much as 5% in premarket trading after it reported quarterly revenue that missed analyst estimates: 260.35 billion Chinese yuan ($36.6 billion) versus the expected 262.07 billion yuan according to the LSEG consensus. Additionally, it increased its share buyback program by $25 billion. The shares rose less than 1% in the end.

*Yum Brands’ shares fell 1.3% after the parent company of KFC, Taco Bell, and Pizza Hut reported fourth-quarter earnings and revenue that missed expectations. Yum’s adjusted earnings per share came in at $1.26, below the $1.40 expected by analysts surveyed by LSEG. Revenue was $2.04 billion versus the consensus estimate of $2.11 billion.

*Uber’s shares fell 1.8% despite a strong earnings report from the rideshare giant. Uber earned 66 cents per share and saw $9.94 billion in revenue, while analysts polled by LSEG expected 17 cents and $9.76 billion.

*Ford’s shares rose 6% after offering stronger-than-expected guidance for 2024 while topping analysts’ expectations for the fourth quarter. Ford posted adjusted earnings of 29 cents per share on $43.2 billion in revenue. Analysts had expected adjusted earnings of 14 cents per share on $40.12 billion in revenue. The company also announced a special dividend of 18 cents per share on top of its regular first-quarter dividend of 15 cents per share.

*Warner Bros. Discovery, along with Fox and Walt Disney’s ESPN, said they will launch a joint sports streaming platform this fall. The new service will be owned by a new company, with each of the three having a one-third stake. Warner Bros. Discovery shares rose 3%. Walt Disney shares were down about 0.8%, while Fox’s Class A shares were also up by more than 3%.

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